Monday, June 08, 2009

More Bailouts

So, someone explain the Canadian GM bailout package to me. $10 billion dollars to 'save' a company building cars nobody wants to buy.

I thought the conservatives believed in capitalism? Isn't the whole point of capitalism and the free market that competition ensures quality and efficiency by weeding out inefficient producers of crap? Isn't the whole point of recessions to clear out the deadwood? What is the point of Adam Smith's invisible hand punishing GM if the government comes and props it up? They won't give welfare to the poor because that would be interfering in the market place, but 10 billion to GM is okay. What am I missing?

To prop up a manufacturing industry in a post-industrial age. Why are we investing 10 billion dollars in an outdated, polluting industry that we need to ban to save the planet from global warming? The fact that GM is failing is telling us that the industrial sector is done. That's not what the economy is about any more. We might as well be investing in buggy whip plants as gasoline engine cars. I could see 10 billion investment in nano tech because that might help keep Canada abreast of developments in nano tech; or genetics or synthetic biology or etc. But investing in an industry thats done?

Not that you can refer to it as 'investing', because Harper was uncharacteristically up front that tax payers will never see most of that money back. I had thought that it was about saving jobs, and I get that from time to time governments may need to step in to stimulate employment etc. But it looks like GM is getting to cut their workforce too.

10 billion dollars. Deficit spending, Borrowed money. We'll be paying not just the 10 billion but the interest on the 10 billion. And for what. To shore up a doomed industry.

What if that were invested in education? In post-secondary training in nano or genetics or any of the other emerging tech. Or research. Or the arts. $10 billion would feed an army of Canadian artists, film makers, writers. 10 billion works out to what, a living wage for about 250,000 writers/artists/etc. Can you imagine what a quarter million writers could accomplish? Even if only one in a thousand became an international best seller, that's still another 250 Canadian authors contributing to world culture, putting Canada no the map, and bringing in revenue and tax dollars. 250 new Margret Atwoods.

If that money was used to launch a quarter million writers, even if only half of them ever got published, and only a half of those ever wrote a second book, that still means 75,000 new writer. Selling books. Paying taxes, paying back, over the lifetime of their writing careers, the full amount of the initial investment, plus a significant return on investment. Non polluting, sustainable renewable resource development.

But no, we throw the money into a black hole where no return on investment is anticipated...

And on a related issue, here's that Canadian Guy talking about bank bailouts: